Michael Saylor, CEO of MicroStrategy and one of the largest bitcoin (BTC) bulls in the world, announced just a few days ago that they have bought another few million worth of bitcoin. According to Saylor, MicroStrategy is well positioned to weather this storm, and it is even foolish not to take full advantage of the current price to buy.
No problems for MicroStrategy
A while back, rumors surfaced that MicroStrategy would be in deep trouble should the bitcoin price drop below $21,000. The bitcoin price eventually fell a lot further than this, but no problems at MicroStrategy.
“When bitcoin was halved, we still had 10x over collateral against it,” Saylor told Christopher Jaszczynski from the popular youtube crypto channel MMCrypto. “So essentially this is like having a million dollar collateral and borrowing $40,000 against it right away.”
According to Saylor, the company is still warm for the time being. Only when the bitcoin price crashes towards $3,500 does MicroStrategy really get into trouble.
“If bitcoin falls by about 95%, then we should pledge some additional collateral,” Saylor added. “We also have other cash flows and assets… so we were prepared for the worst. So if you calculate with our bitcoin position, if bitcoin goes to $3,500 or so, we’ll have to come up with other collateral if it continues to go lower.”
DCA is the best way
Saylor also shared that their strategy for buying bitcoin is actually extremely simple. They use a so-called dollar cost averaging strategy. That essentially means that it doesn’t matter what the bitcoin price does, MicroStrategy just buys new bitcoins every so often, and refuses to sell them again in the short term.
According to Michael Saylor, the only two mistakes MicroStrategy can make are buying too much bitcoin with leverage and stopping buying new bitcoins.